k_denninger

GM's Balance Sheet: A Sign of Impending Doom

Ford looks like a good short play, other than being too cheap. But their just-in-the-money PUTs a week or so ago were selling in the front month with NO PREMIUM! Gee, that was nice - I jumped all over that one. A break below the $8.10 level on Ford (pretty much where all the MAs cluster right now) would be incredible, with the next real support in the $7.50 range and then at $7.

Below that the chasm yawns.... and their recent sales numbers have been nasty.

GM on a technical basis looks like dogmeat. They had their Death Cross, the stock has pretty much flatlined, it has taken several runs at getting over the MAs and yet has been unable to hold. Stochastics Friday suggest perhaps another run at the MA level, perhaps up as far as to the 100 and 200 (which are nearly at the same place), but that looks like an EXCELLENT short entry to me if it gets there and can't break it. Of course a big break downward would be a good entry too; you get below $29, which is very strong support and you've got a pretty clear path down into the ~$25 range.

There's nothing to like about the US Automakers when it comes to "the big picture". Labor is still out of control, health care costs are stratospheric and there's no sign that either of these issues can be dealt with. The companies bought off labor action with unsustainable and unaffordable concessions years ago and frankly I don't see how they can get out of the box now, other than Chap 11 the mess, repudiate the obligations and tell the UAW to go screw.